-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WifO+Q9O4CqMFZbUa6Yztdmoe/an3TJXtESiRMDWLQQrC/Z5fD9td7INODFeZdI6 qnOlg7cY8UB7+WZdaUd98w== 0000088948-98-000001.txt : 19980212 0000088948-98-000001.hdr.sgml : 19980212 ACCESSION NUMBER: 0000088948-98-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971227 FILED AS OF DATE: 19980211 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SENECA FOODS CORP /NY/ CENTRAL INDEX KEY: 0000088948 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033] IRS NUMBER: 160733425 STATE OF INCORPORATION: NY FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-01989 FILM NUMBER: 98530076 BUSINESS ADDRESS: STREET 1: 1162 PITTSFORD VICTOR RD CITY: PITTSFORD STATE: NY ZIP: 14534 BUSINESS PHONE: 7163859500 FORMER COMPANY: FORMER CONFORMED NAME: PIERCE S S COMPANY INC DATE OF NAME CHANGE: 19861210 FORMER COMPANY: FORMER CONFORMED NAME: SENECA FOODS CORP DATE OF NAME CHANGE: 19780425 FORMER COMPANY: FORMER CONFORMED NAME: SENECA GRAPE JUICE CORP DATE OF NAME CHANGE: 19710419 10-Q 1 Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended December 27, 1997 Commission File Number 0-1989 Seneca Foods Corporation (Exact name of registrant as specified in its charter) New York 16-0733425 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 1162 Pittsford-Victor Road, Pittsford, New York 14534 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 716/385-9500 Not Applicable Former name, former address and former fiscal year, if changed since last report Check mark indicates whether registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares outstanding of each of the issuer's classes of common stock at the latest practical date are: Class Shares Outstanding at January 31, 1998 Common Stock Class A, $.25 Par 3,143,125 Common Stock Class B, $.25 Par 2,796,555 PART I FINANCIAL INFORMATION SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In Thousands of Dollars)
12/27/97 3/31/97 -------- ------- ASSETS Current Assets: Cash and Short-term Investments $ 4,034 $ 1,584 Accounts Receivable, Net 51,518 36,477 Inventories: Finished Goods 163,594 75,898 Work in Process 32,311 35,373 Raw Materials 38,178 46,926 ------- ------- 234,083 158,197 Off-Season Reserve (Note 3) (35,689) - Deferred Tax Asset (Net) 6,156 6,156 Refundable Income Taxes 2,279 - Other Current Assets 424 4,432 -------------- --------------- Total Current Assets 262,805 206,846 Property, Plant and Equipment, Net 224,282 207,439 Other Assets 2,239 1,738 -------------- --------------- $489,326 $416,023 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes Payable $ 30,740 $ 18,000 Accounts Payable 78,017 24,435 Accrued Expenses 19,608 25,615 Income Taxes - 599 Current Portion of Long-Term Debt and Capital Lease Obligations 10,051 9,465 --------------- --------------- Total Current Liabilities 138,416 78,114 Long-Term Debt 226,362 214,848 Capital Lease Obligations 8,857 9,280 Deferred Income Taxes 13,785 15,797 Other Long-Term Liabilities 8,770 4,248 10% Preferred Stock, Series A, Voting, Cumulative, Convertible, $.025 Par Value Per Share 10 10 10% Preferred Stock, Series B, Voting, Cumulative, Convertible, $.025 Par Value Per Share 10 10 6% Preferred Stock, Voting, Cumulative, $.25 Par Value 50 50 Common Stock 2,666 2,666 Paid in Capital 5,913 5,913 Net Unrealized Gain on Available-For-Sale Securities 754 435 Retained Earnings 83,733 84,652 --------------- --------------- Stockholders' Equity 93,136 93,736 --------------- --------------- $489,326 $416,023 ======== ======== The accompanying notes are an integral part of these financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (In Thousands, except Share Data)
Three Months Ended 12/27/97 12/28/96 -------- -------- Net Sales $ 275,863 $ 291,188 Other Income (See Notes) - - ------------------ ----------------- 275,863 291,188 Costs and Expenses: Cost of Product Sold 261,643 275,837 Selling, General, and Administrative 9,406 7,025 Interest Expense 6,752 7,496 ------------------ ----------------- Total Costs and Expenses 277,801 290,358 ------------------ ----------------- Earnings (Loss) Before Income Taxes (1,938) 830 Income Taxes (698) 471 ------------------ ----------------- Net Earnings (Loss) $ (1,240) $ 359 ================== ================= Net Earnings (Loss) Applicable to Common Stock (1,246) 359 Weighted Average Common Shares Outstanding 5,939,680 5,939,680 Basic and Diluted Earnings (Loss) Per Share of Common Stock (Exhibit II): Basic Net Earnings (Loss) $ (0.21) $ 0.06 ================= ================= Diluted Net Earnings (Loss) $ (0.21) $ 0.06 ================= ================= The accompanying notes are an integral part of these consolidated condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (In Thousands, except Share Data)
Nine Months Ended 12/27/97 12/28/96 -------- -------- Net Sales $ 589,931 $ 574,403 Other Income (See Notes) - 9,141 ------------------ ----------------- 589,931 583,544 Costs and Expenses: Cost of Product Sold 545,895 528,437 Selling, General, and Administrative 25,271 20,278 Interest Expense 20,111 22,223 ------------------ ----------------- Total Costs and Expenses 591,277 570,938 ------------------ ----------------- Earnings (Loss) Before Income Taxes (1,346) 12,606 Income Taxes (485) 4,710 ------------------ ----------------- Net Earnings (Loss) $ (861) $ 7,896 ================== ================= Net Earnings (Loss) Applicable to Common Stock (878) 7,879 Weighted Average Common Shares Outstanding 5,939,680 5,939,680 Basic and Diluted Earnings (Loss) Per Share of Common Stock (Exhibit II): Basic Net Earnings (Loss) $ (0.15) $ 1.33 ================= ================= Diluted Net Earnings (Loss) $ (0.14) $ 1.31 ================= ================= The accompanying notes are an integral part of these consolidated condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands)
Nine Months Ended 12/27/97 12/28/96 -------- -------- Cash Flows From Operating Activities: Net Earnings $ (861) $ 7,896 Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 21,561 19,796 Deferred Income Taxes (2,176) 1,963 Gain on the Sale of Assets - (9,141) Changes in Working Capital: Accounts Receivable (10,954) 21,146 Inventories (47,193) (8,369) Off-Season Reserve 35,689 39,146 Other Current Assets 4,163 (472) Income Taxes (2,878) 3,183 Accounts Payable, Accrued Expenses and Other Liabilities 48,574 10,796 ------------------ ----------------- Net Cash Provided by Operations 45,925 85,944 ------------------ ----------------- Cash Flows From Investing Activities: Acquisitions (53,672) - Proceeds from the Sale of Assets - 15,511 Additions to Property, Plant, and Equipment (14,160) (7,041) Disposals of Property, Plant, and Equipment 16 6 ------------------ ----------------- Net Cash Provided in (Used by) Investing Activities (67,816) 8,476 ------------------ ----------------- Cash Flows From Financing Activities: Notes Payable 12,740 (87,000) Long-Term Borrowing 15,106 1,343 Payments and Current Portion of Long-Term Debt and Capital Lease Obligations (3,429) (477) Other (18) 73 Dividends (58) - ------------------ ----------------- Net Cash Provided in (Used by) Financing Activities 24,341 (86,061) ------------------ ----------------- Net Increase in Cash and Short- Term Investments 2,450 8,359 Cash and Short-Term Investments, Beginning of Period 1,584 1,297 ------------------ ----------------- Cash and Short-Term Investments, End of Period $ 4,034 $ 9,656 ================== ================== The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS December 27, 1997 1. Consolidated Condensed Financial Statements In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position of the Registrant as of December 27, 1997 and March 31, 1997 and results of operations for the three and nine month periods ended December 27, 1997 and December 28, 1996. All significant intercompany transactions and accounts have been eliminated in consolidation. The March 31, 1997 balance sheet was derived from audited financial statements. The results of operations for the three and nine month periods ended December 27, 1997 and December 28, 1996 are not necessarily indicative of the results to be expected for the full year. The accounting policies followed by the Registrant are set forth in the Notes to the Registrant's financial statements in the 1997 Seneca Foods Corporation Annual Report and 10-K. Other footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated condensed financial statements be read in conjunction with the financial statements and notes included in the Registrant's March 31, 1997 financial report. 2. Basic earnings per share are based on the weighted average number of common shares outstanding. Diluted earnings per share assumes full conversion of common stock equivalents. 3. Off-Season Reserve is the excess of absorbed expenses over incurred expenses to date. The seasonal nature of the Registrant's Food Processing business results in a timing difference between expenses (primarily overhead expenses) incurred and absorbed into product cost. All Off-Season Reserve balances are zero at fiscal year end. 4. On April 18, 1997 the Registrant acquired certain assets of the Aunt Nellie's Farm Kitchens from the Pillsbury Company, an indirect subsidiary of Grand Metropolitan plc, for approximately $24 million (referred to as "Aunt Nellie's"). Aunt Nellie's produces, markets, and sells fruit and vegetable products from plants in the Midwest. Its 1996 sales were approximately $59 million. The Registrant purchased the plants, inventories, accounts receivable, and trademarks of the business. Aunt Nellie's includes facilities located in Clyman, Wisconsin; Covington, Kentucky; and Buckley, Michigan. This acquisition was funded primarily out of working capital. SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS December 27, 1997 5. On May 5, 1997 the Registrant acquired certain assets of the Curtice Burns Foods, Inc. ("Curtice Burns"), a wholly owned subsidiary of Pro-Fac Cooperative, Inc., used in the canned vegetable business of Curtice Burns. The purchase price was approximately $29 million. The 1996 sales of the acquired assets were approximately $37 million. The Registrant purchased two plants, inventories, and trademarks of the business. Assets purchased include a warehouse located in LeRoy, New York and a processing plant located in Leicester, New York. In conjunction with the acquisition, the Registrant and Curtice Burns entered into a long-term strategic alliance, combining their New York agricultural departments into one organization, now managed by Curtice Burns. This acquisition was funded primarily out of working capital. A $15 million long-term debt financing to fund the long-term assets of this acquisition and the Aunt Nellie's acquisition described above was completed in September 1997. The debt requires principal payments of $3 million beginning September 2000 and carries an interest rate of 9.17%. 6. The following summary, prepared on a pro forma basis, combines the consolidated results of operations as if Aunt Nellie's and Curtice Burns were acquired at the beginning of the periods presented: Nine months 9/27/97 Net Sales $596,848 Net Earnings (Loss) (869) Net Earnings (Loss) per Share (.15) 7. During the first quarter of the prior year, the Registrant sold its investment in Moog, Inc. Class A Common Stock back to Moog. This resulted in a Pre-Tax gain of $7,501,000. 8. The Financial Accounting Standards Board recently issued Statement of Financial Accounting Standards (SFAS) No. 130 on "Reporting Comprehensive Income and SFAS No. 131 on "Disclosures about Segments of Enterprise and Related Information." SFAS No. 130 changes the reporting of certain items currently reported in the common stock equity section of the balance sheet and is not expected to have a material effect on the Registrant's financial statements. This standard is effective for fiscal years beginning after December 15, 1997. SFAS No. 131 requires that public companies report certain information about operating segments in their interim financial statements. It also establishes related disclosures about products and services, geographic areas, and major customers. The Registrant is currently evaluating what impact this standard will have on its disclosures. This standard is effective for fiscal years beginning after December 15, 1997. SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS December 27, 1997 9. During the second quarter, the Registrant completed a modification to its Revolving Credit Facility. Under this agreement, which has been extended to June 30, 1999, there is a new cleandown provision where the Registrant must reduce its Notes Payable to below $30 million for a 30-day period during each year. In addition, the total available credit was reduced from $150 million to $130 million on December 1, 1997. The Registrant has already complied with the cleandown provision of the Revolving Credit Facility in the current fiscal year. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS December 27, 1997 Results of Operations: Sales: Sales reflect an increase of 2.7% for the first nine months versus 1996. The sales were higher in spite of lower canned vegetables quantities sold under the Alliance with Pillsbury. Under this Green Giant Net Sales were $280,301,000 for nine months ended December 1997 versus $333,341,000 for the comparable period in the previous year. Non-Green Giant vegetable sales quantities were up 86.6% while juice and fruit sales quantities were up 6.3%. The vegetable sales increase was largely due to the acquisition of the Curtice Burns and Aunt Nellie's canned vegetable businesses described above. Costs and Expenses: The following table shows cost and expenses as a percentage of sales: Three Months Ended Nine months Ended 12/27/97 12/28/96 12/27/97 12/28/96 -------- -------- -------- -------- Cost of Product Sold 94.9% 94.7% 92.5% 92.0% Selling 2.9 1.9 3.5 2.7 Administrative 0.5 0.5 0.8 0.8 Interest Expense 2.4 2.6 3.4 3.9 --------------------------------------------------------- 100.7% 99.7% 100.2% 99.4% ========================================================= Higher Cost of Product Sold percentages (i.e. lower Gross Margins) reflect, in part, lower selling prices in the canned vegetable business than the prior year. This was partially offset by better margins in the juice and fruit business during the same period. Income Taxes: The effective tax rate used in 1998 is 36% and 1997 is 37.4%. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS December 27, 1997 Financial Condition: The financial condition of the Registrant is summarized in the following table and explanatory review (In Thousands): For the Quarter For the Year Ended December Ended March 1997 1996 1997 1996 ---- ---- ---- ---- Working Capital Balance $124,389 $125,833 $128,732 $108,761 Quarter Change 148 7,798 - - Notes Payable 30,740 26,000 18,000 113,000 Long-Term Debt 235,219 230,239 224,128 226,574 Current Ratio 1.90:1 2.07:1 2.65:1 1.57:1 Inventory (Average) Turnover 3.8 3.0 3.5 2.5 The change in the working capital for the quarter from the prior year is due in part to lower net earnings of $1.6 million, settlement payment of an IRS audit of $2.1 million, and higher capital expenditures in current year than the prior year. The Registrant was in compliance with its debt covenants related to short-term and long-term Debt. However, the Registrant believes that it may not meet certain debt covenants as of the end of the 1998 fiscal year to the extent that weak selling price conditions persist in the canned vegetable business. See Consolidated Statements of Cash Flows for further details. Forward-Looking Statements When used in this discussion, the words, "believes", "anticipates", "expects", and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected, including among other things decreases in the prices of packaged food products or increases in the cost of the Registrant's raw materials (particularly fruit and vegetable produce) resulting from oversupply or undersupply, respectively, reflecting growing conditions in the U.S. and overseas regions from which the Registrant obtains its produce and from other factors affecting food costs and production. These risks insofar as they have affected results of operations in the past three years are discussed under "Management's Discussion and Analysis of Financial Conditions and Results of Operations" in Exhibit No. 13 of the Registrant's Annual Report on Form 10-K for its Fiscal Year Ended March 31, 1997, as filed with the Securities and Exchange Commission. Results of operations in any past period should not be considered indicative of the results to be expected for future periods. PART II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities None. Item 3. Defaults on Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 11 - (11) Computation of earnings per share (b) Exhibit 27 - (27) Financial Data Schedules (c) Reports on Form 8-K - None during the quarter. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Seneca Foods Corporation (Registrant) /s/Kraig H. Kayser February 10, 1998 Kraig H. Kayser President and Chief Executive Officer /s/Jeffrey L. Van Riper February 10, 1998 Jeffrey L. Van Riper Controller and Chief Accounting Officer EX-11 2 EXHIBIT 11 SENECA FOODS CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (In thousands except share data)
Three Months Ended Nine months Ended 12/27/97 12/28/96 12/27/97 12/28/96 -------- -------- -------- -------- Net Earnings (Loss) Applicable to Common Stock: Net Earnings (Loss) $ (1,240) $ 359 $ (861) $ 7,896 Deduct Preferred Cash Dividends 6 6 17 17 ------------------------------------------------------------------ Net Earnings (Loss) Applicable to Common Stock Basic $ (1,246) $ 353 $ (878) $ 7,879 =================================================================== Net Earnings (Loss) Applicable to Common Stock Basic $ (1,246) $ 353 $ (878) $ 7,879 Add Preferred Cash Dividends on Convertible Preferred 5 5 15 15 ------------------------------------------------------------------ Net Earnings (Loss) Applicable to Common Stock Diluted $ (1,241) $ 358 $ (863) $ 7,864 =================================================================== Weighted Average Common Shares Outstanding Basic 5,939,680 5,939,680 5,939,680 5,939,680 Effect of Common Stock Equivalents 67,390 67,390 67,390 67,390 ------------------------------------------------------------------- Weighted Average Common Shares Out- standing for Diluted 6,007,070 6,007,070 6,007,070 6,007,070 ================================================================== Basic (Loss) Earnings Per Share $ (.21) $ .06 $ (.15) $ 1.33 ================================================================= Diluted (Loss) Earnings Per Share $ (.21) $ .06 $ (.14) $ 1.31 =================================================================
EX-27 3
5 Commercial and Industrial Companies Article 5 of Regulation S-X 1000 9-MOS MAR-31-1998 DEC-27-1997 4034 0 51696 178 234083 262805 393000 168718 489326 138416 235219 0 70 2666 90400 489326 589931 589931 545895 545895 25271 0 20111 (1346) (485) (861) 0 0 0 (861) (0.15) (0.14) Other Expenses is Selling, General and Administrative Expenses
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